Florida Peninsula secures 43% upsized $250m Palm Re 2025-1 cat bond at reduced pricing
Florida Peninsula Insurance Company has now successfully priced its latest catastrophe bond transaction, securing the 43% upsized target of $250 million of named storm reinsurance protection from the new Palm Re Ltd. (Series 2025-1) issuance, while pricing of the notes was finalised roughly 10% below the mid-point of the initial guidance range, Artemis has learned.
Florida Peninsula returned to the catastrophe bond market at the beginning of March for its second sponsorship.
Initially, Florida Peninsula was looking to secure $175 million or more in named storm reinsurance from this Palm Re Ltd. (Series 2025-1) deal.
But, in our first update on this deal, we revealed that, Florida Peninsula’s size target for this cat bond issuance had increased, with the company targeting between $200 million and $250 million of protection, while the price guidance had also been lowered.
Now, we’ve learned that the upper-end of the increased target size range was achieved at the reduced pricing, with this Palm Re 2025-1 cat bond now set to provide Florida Peninsula Insurance Company with $250 million of named storm reinsurance protection for itself and its subsidiaries Edison Insurance Company and the Ovation Home Insurance Exchange.
As a result, Palm Re Ltd., a Bermuda based special purpose insurer (SPI), will now issue a single $250 million, tranche of Series 2025-1 Class A notes.
These notes will provide the sponsor with indemnity based Florida named storm reinsurance on a per-occurrence basis and over a three year term running from June 1st.
The $250 million in Series 2025-1 Class A notes that Palm Re will now issue come with an initial base expected loss of 1.8%.
The notes were first offered to cat bond investors with price guidance in a range from 8.25% to 9%, which was later narrowed to between 7.75% to 8.25%.
We’re now told that the $250 million of Class A notes have been priced to pay investors a spread of 7.75%, so roughly 10% below the mid-point of the initial guidance range.
As we’ve explained before, this new Palm Re 2025-1 catastrophe bond will see its protection sitting above last year’s 2024-1 issuance in the Florida Peninsula reinsurance tower this year.
This is a great result for Florida Peninsula Insurance Company, as the organisation has benefited from the strong investor appetites and price execution in the cat bond market to secure a meaningful $250 million in named storm reinsurance protection at attractive pricing.
You can read all about this new Palm Re Ltd. (Series 2025-1) catastrophe bond transaction and every other cat bond ever issued in our Artemis Deal Directory.
